Manufacturers: EPA Chemical Decision Will Directly Threaten Our Ability to Innovate, Create Jobs and Defend Our Nation
Washington, D.C. – Following the release of the Environmental Protection Agency’s rulemaking surrounding the monitoring for per- and poly-fluoroalkyl substances (PFAS) in municipal water systems, National Association of Manufacturers Managing Vice President of Policy Chris Netram released the following statement:
“Manufacturers support efforts to remove potentially harmful chemicals from our water systems, but again the EPA has set standards that are not feasible and will directly threaten manufacturers’ ability to invest, innovate and create jobs in America. In many instances, there is no viable alternative for these chemicals, and companies may be forced to change plans dramatically to grow facilities and hire new workers.
“The severity of the proposed regulations will mean higher prices for everything—community water and waste systems, medical treatments and electronics. More alarming, the regulations will make it more difficult to produce the equipment our military needs to defend our nation. The final rule requires water systems to monitor, sample and treat at near zero levels, which will increase costs throughout the supply chain. We are looking at all options to reverse this harmful decision and to slow the regulatory onslaught that directly undermines the president’s efforts to grow manufacturing in the United States.”
-NAM-
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
Manufacturers Bracing for FCC Vote on Broadband Regulation Rule
The Federal Communications Commission is set for an April 25 vote to bring back “net neutrality,” aiming to reinstate a national regulatory framework for broadband internet services, Fox Business reports. The NAM is speaking out against it.
What is it: “The Biden administration’s rule would regulate broadband services as an essential resource under Title II of the Communications Act.’’
How did we get here: “In 2015, the FCC adopted the Obama administration’s [net] neutrality rules, known as the Open Internet Order. The rules survived a legal challenge with a favorable ruling by a federal appeals court in 2016.”
- In 2017, the Trump administration rolled back broadband regulation with a regulation known as the Restoring Internet Freedom rule, citing it as an impediment to innovation and investment by internet service providers. This decision held up against a legal challenge.
- By 2021, President Biden’s executive order suggested reviving Obama-era broadband rules. With Democrats leading the FCC by October 2023, a formal process began, setting the stage for a conclusive vote.
What would happen next: The NAM sent detailed feedback to the FCC last December, warning that reinstating broadband regulation “will lead to a slowdown in innovation and investment.”
- The NAM’s feedback pointed to the negative impact of the Obama administration’s previous attempt to implement the policy: “In 2015, the last time the FCC sought to regulate broadband under Title II, annual industry capex fell by half a billion dollars.”
- The FCC’s decision exceeds its authority and could also be subject to litigation: “Congress has not explicitly given the commission the authority to regulate broadband and reclassify it in this way; therefore, the FCC lacks authority to do so.”
Our take: “As with the other elements of the regulatory onslaught out of Washington these past few years, this is yet another solution in search of a problem, because we already have an open and fair internet,” said NAM Senior Director of Technology Policy Franck Journoud. “As we’ve warned, this will regulate broadband as if it were the same as rotary telephone service, which would slow innovation. The commission really is doing nothing to answer the question of ‘why’ this policy should be brought back.”
- The NAM has long opposed broadband regulation and went to court to support the FCC’s 2017 decision to repeal the rule. As NAM Chief Legal Officer Linda Kelly said, “Internet-driven technology is at the heart of modern manufacturing, and the FCC’s decision to repeal the onerous 2015 net neutrality rule was a victory for the competitiveness of manufacturers in America.”
The NAM will closely follow the FCC’s latest vote on net neutrality and is prepared to oppose any decision to restore this outdated policy.
TSMC to Receive Up to $6.6 Billion in CHIPS Funding
The Biden administration on Monday announced that TSMC’s Arizona subsidiary will receive up to $6.6 billion in grants from the 2022 CHIPS and Science Act, The New York Times reports. The announcement is the latest move by the Biden administration to make the United States a leading producer of cutting-edge semiconductor technology.
What’s going on: The funding “will help support the construction of TSMC’s first major U.S. hub, in Phoenix. The company has already committed to building two plants at the site and will use some of the grant money to build a third factory in Phoenix, U.S. officials said on Sunday.”
- The company will “increase its total investments in the United States to more than $65 billion, up from $40 billion.”
- “TSMC’s investment is expected to create about 6,000 direct manufacturing jobs and more than 20,000 construction jobs, federal officials said.”
- In addition to the grants, the federal government is also offering TSMC up to $5 billion in loans.
Impact on U.S. chip production: “With projects such as TSMC’s, the U.S. is on track to make about 20% of the world’s cutting-edge chips by 2030, the Commerce Department said. It called the project the largest foreign direct investment in a new project in U.S. history,” reports The Wall Street Journal (subscription).
- Earlier this year, the Biden administration announced major chips funding awards for Intel and GlobalFoundries.
The NAM’s reaction: “Today’s announcement from TSMC and @CommerceGov makes America stronger,” the NAM wrote in a social post Monday. “The NAM-championed CHIPS and Science Act continues to spur new investments in cutting-edge semiconductor technology that is essential to advancing U.S. economic competitiveness.”
Final Heavy-Duty Tailpipe Rule Presents Challenges
The Environmental Protection Agency’s new heavy-duty tailpipe emissions rule is unrealistic and unfeasible, the NAM said Friday.
What’s going on: “The rule—proposed in April 2023—is part of the ‘Clean Trucks Plan’ unveiled in 2023, which includes light-duty tailpipe and nitrogen oxide rules,” Bloomberg Law (subscription) reports.
- “The[se] ‘Phase 3’ standards build on previous phases of a broader regulatory program to stem greenhouse gas emissions from vehicles such as delivery trucks, long-haulers, and buses.”
- The Phase 1 rule was finalized in 2011, and the Phase 2 rule in 2016.
Why it’s problematic: While the new regulation grants automakers more time for implementation than previous versions did—thanks to input from manufacturers and their advocates, including the NAM—it still “fails to reconcile with the realities of current U.S. infrastructure,” according to an NAM social post.
- “Critical permitting reforms to strengthen transmission systems and a technology-neutral approach for manufacturers are essential to reaching U.S. climate goals,” the NAM wrote.
What should be done: Congress must reform the broken U.S. permitting system so we can build the electric vehicle charging station infrastructure required to implement a rule of this magnitude, the NAM said earlier this month.
NAM: OSHA “Walkaround” Rule an Example of Regulatory Onslaught
The U.S. Occupational Safety and Health Administration’s newly finalized “walkaround rule” is unlawful and will not further the agency’s mission of ensuring safe working conditions, the NAM said after the rule’s release.
What’s going on: The long-awaited final rule, which goes into effect May 31, states that “workers may authorize another employee to serve as their representative or select a non-employee,” according to the Department of Labor.
- The policy broadens the basis upon which a non-employee representative may be deemed “reasonably necessary to the conduct of an effective and thorough inspection.”
Why it’s problematic: In addition to having little to do with making workplaces safer, the new policy violates OSHA’s own mandate—and, quite possibly, manufacturers’ constitutional rights, the NAM said.
- The “rule does nothing to advance OSHA’s mission of ensuring safe working conditions,” said NAM Chief Legal Officer Linda Kelly. “Forcing businesses to accommodate third parties with no safety expertise in their facilities infringes on employers’ property rights, invites new liabilities and introduces elements of chaos and disruption to safety inspections. … [It also] clearly violates OSHA’s statutory mandate to conduct inspections within ‘reasonable limits and in a reasonable manner’ with ‘minimum burden’ on employers, and potentially violates manufacturers’ constitutional rights.”
Next steps: The NAM is weighing legal action to reverse the final rule.
Manufacturers: Walkaround Rule Exceeds OSHA’s Authority
Washington, D.C.: Following the release of the Occupational Safety and Health Administration’s recent rulemaking on the Worker Walkaround Representative Designation Process, National Association of Manufacturers Chief Legal Officer Linda Kelly released the following statement:
“Today’s rule does nothing to advance OSHA’s mission of ensuring safe working conditions. Forcing businesses to accommodate third parties with no safety expertise in their facilities infringes on employers’ property rights, invites new liabilities and introduces elements of chaos and disruption to safety inspections.
“By unlawfully expanding third-party access to manufacturers’ worksites, this proposal clearly violates OSHA’s statutory mandate to conduct inspections within ‘reasonable limits and in a reasonable manner’ with ‘minimum burden’ on employers, and potentially violates manufacturers’ constitutional rights. And, for the first time, OSHA would determine who qualifies as an ‘authorized representative’ of employees, which until now has been exclusively recognized as the jurisdiction of the National Labor Relations Board.
“This is another clear example of the federal regulatory onslaught—a proposal that upends settled precedent and ignores the reasoned decision-making required by the Administrative Procedure Act. For these reasons, the NAM will be considering legal action to reverse this incredibly destabilizing decision.”
-NAM-
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.85 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
Group Urges Ratification of Deep-Sea Mining Treaty
A group of former political and military leaders is urging the Senate to ratify the United Nations’ Convention of the Law of the Sea to kickstart U.S. deep-sea mining efforts, The Wall Street Journal (subscription) reports.
What’s going on: A draft letter seen by the Journal and signed by 331 individuals, including former Secretary of State Hillary Clinton and former Secretary of Homeland Security Michael Chertoff, calls “on Senate leaders to ratify the treaty in a bid for the country to stake its claim over areas of international waters where minerals such as cobalt and nickel, considered critical for the energy transition and in defense applications, can be sourced.”
- The treaty, which the U.S. recognized after it went into effect in 1994 but never ratified, is an international agreement governing the use of ocean resources.
Why it’s important: The treaty’s governing body, the International Seabed Authority, meets next week in Jamaica to determine “the final parts of the mining code—the set of laws and regulations that will eventually govern seabed mining. … As a nonvoting member, the U.S. has no say on laws pertaining to the seabed and also can’t be awarded exploration contracts to mine the seafloor in international waters. China currently has five.”
A groundswell: Deep-sea mining is gaining political support.
- Earlier this month, Reps. Carol Miller (R-WV) and John Joyce (R-PA) introduced a measure in support of it.
- “It’s vital to our security and economic interests that the [China]-controlled monopoly on these materials is broken,” Rep. Joyce said.
Extend Pro-Growth Tax Policies, Small Manufacturer Tells Senate
If manufacturing is a team sport, the rules of the game are the U.S. tax code—and to ensure a level playing field for everyone, that code must remain constant, Ketchie President and Owner and NAM Small and Medium Manufacturers Group Chair Courtney Silver told the Senate Finance Committee Tuesday.
The main way to do it, she said, is by restoring three key tax policies: immediate expensing for domestic R&D, enhanced interest deductibility and full expensing.
What’s going on: Thanks to the 2017 Tax Cuts and Jobs Act, Silver’s family-owned, North Carolina–based precision machining company and many other manufacturers were able to grow their companies, invest in workers and give back to their communities, Silver said in testimony during the “American Made: Growing U.S. Manufacturing Through the Tax Code” hearing.
- But two years ago, “the rules of the game began to change, making it more difficult for manufacturers to thrive in America,” she went on. “Crucial policies began to expire.”
Why it’s important: If Congress does not act soon, additional pro-growth tax cuts will expire, further harming manufacturing in the U.S.
- And “more tax increases are on the way,” Silver told committee members, referring to the additional TCJA provisions scheduled to expire next year. “Other critical provisions expire at the end of 2025, which will have a direct impact on the manufacturing sector. Ketchie will be directly harmed by the loss of the pass-through deduction, the increases in our tax rates and the reduced protection from the estate tax.”
Unstoppable combination: The 2017 tax reforms, “paired with pro-growth policies like immediate expensing of capital investments, drove historic growth in the manufacturing sector,” Senate Finance Committee Ranking Member Mike Crapo (R-ID) said during the hearing, citing NAM data on the significant, positive impact of the cuts.
- Indeed, “Ketchie might not be here today if we did not have the economic boom caused by tax reform in the years prior to the pandemic,” said Silver, who called immediate expensing for domestic R&D expensing, enhanced interest deductibility and full expensing “a game-changer for the manufacturing industry.”
Team players: Congress must restore these three provisions and other critical provisions that are set to expire next year.
- “Manufacturing truly is a team sport, and you are all on that team,” Silver told the committee. “Small companies like mine are counting on you to play with us rather than against us, and to ensure that our tax code does the same.”
- The NAM has called on the Senate to advance the House-passed Tax Relief for American Families and Workers Act, which would restore the three key tax policies.
NAM Hosts German, Mexican Delegations
The NAM was host to multiple representatives and dignitaries from Germany and Mexico last week for a series of meetings aimed at strengthening the ties between the two countries and the U.S.
What’s going on: On different days last week, the NAM met with German Ambassador to the U.S. Andreas Michaelis; the leadership of the Mexican Business Coordinating Council; the presidents of the Federation of German Industries and the Germany-based Mechanical Engineering Industry Association; and a delegation from the Germany-based Transatlantic Business Initiative.
- A discussion common to all the gatherings: improving international cooperation to support closer economic partnerships between our countries.
The U.S.–Europe relationship: In a meeting with Michaelis, Germany’s ambassador to the U.S. since August 2023, the NAM expressed the importance of a continued, positive economic relationship between the U.S. and Europe—especially now, given Russia’s continued war against Ukraine.
- “Great to meet with German Ambassador to the U.S. Andreas Michaelis to discuss the importance of strengthening our economic ties and our shared democratic values,” NAM President and CEO Jay Timmons wrote in a social post.
- Germany, the fourth-largest economy in the world, is a vital U.S. trade and investment partner. In 2022, it contributed $196 billion of manufacturing trade and $218 billion of manufacturing investment.
Challenges remain: However, some proposed and expected European Union regulations present a hurdle to future collaboration, a matter the NAM raised in its meetings.
A key partner: In their discussion with Mexican Business Coordinating Council President Francisco Cervantes—with whom Timmons met last summer ahead of the third United States–Mexico–Canada Agreement “Free Trade Commission” in Cancun, Mexico—NAM leaders underscored the significance of the increasingly close trade ties between the U.S. and Mexico.
- In 2023, for the first time in two decades, Mexico became the leading source of goods imported into the U.S., and in 2022, the value of the U.S. products and services trade with Mexico was $855 billion.
- The CCE is Mexico’s broadest business federation.
Concerning disruptions: Last year, in a move that worried both the NAM and the CCE, the U.S. twice suspended the processing of commercial imports from Mexico so it could redirect U.S. Customs and Border Protection personnel to handle an influx of migrants at the U.S.–Mexico border.
- These temporary closures cost manufacturers in the U.S. hundreds of millions of dollars each day.
USMCA: The groups also discussed the USMCA, underscoring the importance of maintaining this critical agreement while also continuing to spotlight commercial challenges in Mexico:
- Its energy policies, which favor Mexican energy firms and have denied and revoked permits to major U.S. energy investors
- Its de facto ban on genetically modified corn, as well as some of its telecommunications-sector policies and its treatment of state-owned enterprises
NAM to White House: Maintain, Improve Trade Facilitation Measure
As lawmakers consider proposals to scale back the de minimis treatment of low-value goods entering the U.S., the NAM and several of its partners are reminding stakeholders of the importance of having a streamlined, tariff-free customs entry process for such imports.
- These shipments are still subject to all U.S. laws and information requirements that enable enforcement at the border.
Last week, a group consisting of labor unions, select business associations and other stakeholders formed a coalition against certain de minimis imports, according to CNBC.
A critical provision: The NAM and six allied groups pushed back, urging the White House to maintain the so-called “de minimis” import entry type, which permits goods valued at less than $800 to enter the U.S. in a streamlined manner and tax-free.
- “De minimis has benefitted thousands of American small businesses across all sectors,” said the groups. “For example, de minimis allows businesses to obtain inputs for domestically manufactured products into the United States more efficiently and with fewer unnecessary administrative requirements.”
- “It has also made purchasing goods online more affordable and accessible for consumers at a time of inflation and supply chain challenges. … The average value of a de minimis package is roughly $50. If de minimis were to be eliminated or significantly degraded … a $50 delivery could become a more than $100 delivery.”
Combating disinformation: Proponents of eliminating or significantly degrading de minimis cite several concerns with the entry type that are unfounded, the NAM and its allies said.
- “There is no evidence that illegal products are more prevalent in de minimis shipments,” they went on, citing a CBP executive who refuted the false claim that de minimis shipments aren’t screened.
- When it comes to fentanyl, “[a]s government enforcement statistics make clear, the overwhelming majority of fentanyl enters the United States in large shipments from Mexico … smuggled in passenger vehicles, by pedestrians, and concealed in truck shipments. De minimis packages, on the other hand, arrive in the United States overwhelmingly by air transportation throughout the country.”
- Finally, eliminating the de minimis entry type would strain border control. “[D]egrading de minimis and routing one billion shipments into more resource intensive processing streams would require tens of thousands of CBP personnel to process information that is not related to enforcement and collect duty, rather than spending that time on activities that would actually interdict illicit items.”
Other solutions: The letter urges the administration to consider “practical, innovative ways to improve de minimis without increasing costs for consumers and small businesses.”
- Customs and Border Protection should use the authority it already has to build on existing enforcement of U.S. trade laws at the border by separating the vast universe of compliant shipments from illicit packages.
- This can be done through a rulemaking to formalize ongoing tests that require additional information on low-value shipments, closing information sharing gaps and employing a more “future proof” approach to include the use of technology.